It is common practice, or at least it appears to be common, to see business owners excluding coverage for themselves under workers compensation insurance. We find this to be the case due to the cost savings to the business, and the usual health insurance that is in place for the owner in question. The problem is, primary health insurance is not meant to cover injuries and illnesses that occur on work time. Medicare coverage also indicates that it is not meant to cover work related injuries, either. So, if a business owner is injured on the job and assumes his health insurance company will pay for it without question, that is not necessarily the case. Plus, if you end up not being able to work due to the injury or sickness that happened on the job, your health insurance will not pay you for the time you had to take off from work. Workers Compensation, if the owners elect coverage, will not only provide the medical expenses, but also the wages (or cash equivalents) for those things that happen on the job.
Apart from the above, if you have employees you are required by law to carrier workers compensation insurance. Another consideration regarding sub-contractors and 1099’s: If you are 1099’ing someone and it happens to be their only gig, and its a long gig, and you have alot of involvement in direction or proximity to this 1099’d person, you should probably consider purchasing workers compensation insurance. California recently passed a law regarding ‘gig workers,’ that points to the sentiments here in this section.